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You just received an insurance settlement offer related to an accident you had four years ago. The offer gives you a choice of one of
You just received an insurance settlement offer related to an accident you had four years ago. The offer gives you a choice of one of the following three offers: Option A: $6,500 on the first day of each year for 40 years Option B: $610 on the first day of each month for 25 years Option C: $75,000 as a lump sum payment today You can earn 8.75% on your investments. You do not care if you personally receive the funds or if they are paid to your heirs should you die within the settlement period. Which option would you choose? Explain why by showing the calculations. (10 points)
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